The process of converting TAZAMA pipeline from a conduit conveying commingled feedstock for refinery to one carrying finished product (diesel) is at 90% of all works and it will be completed by Saturday next week (18th March 2023),” said Hon. Eng. Peter Chibwe Kapala, the Minister of Energy.
“All the crude oil (commingled feedstock), which was in the pipeline from the time Indeni Refinery was shut down by the PF government in April 2021 up to now, has since been removed, stored and is ready to be ‘refined’. This is about 78,000 tonnes or 80 million litres of fuel (petrol and diesel),” Hon. Kapala added.
The INDENI plant is expected to fire up and start processing the commingled feedstock by next Saturday, March 18th. “Once the commingled feedstock has been processed and sold, the funds raised will be used to pay for the costs incurred in cleaning and converting the pipeline, pay some of the debts owed by TAZAMA Pipeline Limited and for the operations and maintenance of facilities of TAZAMA Pipeline,” said Hon. Kapala.
Government, through the Treasury, already released K500m to INDENI for payment of redundancies for all workers and another K32 million for clearing of debts as well as for operations.
“The cleaned-up pipeline will be used to pump diesel from Dar es Salaam to Ndola using the older and smaller pipe while the newer bigger-gauge pipe will pump finished products to Mpika terminal for uptake by tankers. The New Dawn Government shall expand the storage facilities and also increase numbers of pumping and loading gantries at Mpika to allow for better and more efficient conveyance. All diesel to be offloaded at Ndola and Mpika shall be transported to parts of Zambia using Zambian tankers only. The operationalisation of TAZAMA Pipeline to carry finished products will reduce the pump price of diesel as transportation costs will be reduced,” Hon. Kapala said.
“Government is also working on reducing pump prices of both petrol and diesel by introducing bulk purchases of petroleum products, where Oil Marketing Companies (OMCs) pool resources together and order at a known price and one which the government would have negotiated. Currently, the procurement is liberal and disaggregated and this doesn’t help the consumer in many ways,” Hon. Kapala added.
MONTHLY REVIEW OF FUEL PUMP PRICES TO REMAIN IN PLACE
“Due to sensational media reports to the contrary, I wish to restate that the New Dawn Government has no plans to revert to previous ways of adjusting fuel prices after months, as that makes it hard to manage the debts owed to oil marketing companies and doesn’t make the pump price to be cost-reflective,” said Hon. Kapala.
“At no point in my recent media interviews has my office said that we are going back to the quarterly review system. As things start, we shall continue with monthly review to allow consumers to only pay for true costs. The completion of the cleaning of the TAZAMA pipeline – and the subsequent use of it to transport diesel at a cheaper transportation cost – doesn’t automatically mean we shall revert to the quarterly review. What we are saying is that, with the use of the pipeline, bulk purchases and bulk storage can allow for quarterly reviews because then as a country we can stock fuels for about three months and this allows us to tie the pump price to true costs. Even then, it will simply be a consideration. And if the numbers are right, we can revert to quarterly review. Until then there is no plan to move from monthly reviews. Monthly reviews